Answers to common questions about the tools and platforms reshaping how organisations measure, report, and act on environmental, social, and governance commitments.
What is ESG technology?
ESG technology refers to the software and platforms that help organisations collect, manage, report, and act on environmental, social, and governance data. It covers everything from carbon accounting and sustainability reporting to supply chain screening and climate risk modelling. The ESG Tech Report tracks the companies and tools driving this market.
What is carbon accounting software?
Carbon accounting software measures and tracks an organisation’s greenhouse gas emissions across Scope 1 (direct), Scope 2 (energy), and Scope 3 (value chain) categories. These platforms automate data collection from utility bills, travel records, procurement systems, and supplier questionnaires, then calculate emissions using standardised conversion factors. The challenge is Scope 3, which can represent over 90% of a company’s total emissions and relies heavily on estimates and supplier cooperation.
What is the difference between ESG reporting and sustainability reporting?
In practice, the terms are used interchangeably. ESG reporting typically refers to structured disclosure against specific frameworks like CSRD, ISSB, or TCFD, aimed at investors and regulators. Sustainability reporting is broader and may include voluntary disclosures, impact narratives, and stakeholder communications. The technology serving both is largely the same.
What is CSRD?
The Corporate Sustainability Reporting Directive is an EU regulation requiring companies to disclose detailed environmental, social, and governance data under the European Sustainability Reporting Standards. It applies to large EU companies first, then extends to smaller companies and non-EU companies with significant EU operations. CSRD significantly expands the scope of mandatory ESG disclosure compared to its predecessor, the Non-Financial Reporting Directive.
What is ISSB?
The International Sustainability Standards Board, part of the IFRS Foundation, publishes global baseline sustainability disclosure standards. IFRS S1 covers general sustainability-related financial disclosures and IFRS S2 covers climate-related disclosures. Multiple jurisdictions are adopting or aligning with ISSB standards, making them the closest thing to a global ESG reporting standard.
What are Scope 3 emissions?
Scope 3 emissions are indirect greenhouse gas emissions that occur across a company’s value chain, both upstream and downstream. They include purchased goods and services, business travel, employee commuting, transportation, waste, and the use and disposal of sold products. Scope 3 typically represents the largest share of a company’s carbon footprint and is the hardest to measure accurately because it depends on data from suppliers, customers, and third parties.
What is ESG data management?
ESG data management covers the collection, validation, storage, and analysis of environmental, social, and governance data across an organisation. The challenge is that ESG data comes from dozens of sources in different formats, often manually, and must be auditable. ESG data management platforms centralise this process and provide audit trails for regulators and assurance providers.
What is greenwashing detection technology?
Greenwashing detection technology uses natural language processing and AI to analyse corporate sustainability claims against actual reported data, regulatory filings, and third-party sources. These tools flag discrepancies between what companies say and what the data shows. Regulators, investors, and NGOs are the primary users.
What is climate risk modelling?
Climate risk modelling uses scenario analysis to assess how physical risks (flooding, heat, wildfire) and transition risks (carbon pricing, regulation, market shifts) could affect an organisation’s assets, operations, and financial performance. TCFD and ISSB both require scenario-based climate risk disclosure, driving demand for software that can model these exposures across portfolios and geographies.
What is supply chain ESG screening?
Supply chain ESG screening evaluates suppliers against environmental, social, and governance criteria. It includes carbon footprint assessment, labour practices review, sanctions and deforestation risk checks, and ongoing monitoring for regulatory violations or adverse media. Technology platforms automate questionnaire distribution, scoring, and continuous monitoring across hundreds or thousands of suppliers.
